HP’s shares experience an 8% decline after missing revenue targets

Shares of HP fell over 8% on Wednesday morning following the release of their fiscal third-quarter earnings, which failed to meet Wall Street’s expectations.

HP reported a revenue of $13.2 billion, slightly lower than the projected $13.37 billion by analysts from Refinitiv. Adjusted earnings per share aligned with estimates at 86 cents. The company provided weak guidance, attributing it to the slower-than-anticipated improvement in PC pricing.

Analysts from Bernstein expressed disappointment with HP’s earnings for the quarter but anticipate an improvement in PC revenues in the future. However, they expressed concerns about the printing business’ potential growth, stating that weak printer shipments could impact supplies growth in the medium term.

Similarly, Credit Suisse analysts identified HP’s print segment as their primary concern due to potential long-term weakness and the need for more aggressive pricing. They adjusted their predictions for the company’s fiscal fourth quarter and full year accordingly.

Deutsche Bank analysts also revised their outlook for HP, lowering their price target from $32 to $30. They mentioned that although HP’s results were in line with expectations, the company faced weaker demand caused by a slower recovery in China and a pessimistic long-term outlook for their print business.

Nonetheless, the Deutsche Bank analysts highlighted some positive aspects of the report. They commended HPQ’s ability to maintain solid operating margins for both segments despite a challenging demand environment. They were also encouraged by the company’s plan to restart share repurchases to offset dilution in the near future.